Correlation Between DSV Panalpina and Dampskibsselskabet

Can any of the company-specific risk be diversified away by investing in both DSV Panalpina and Dampskibsselskabet at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DSV Panalpina and Dampskibsselskabet into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DSV Panalpina AS and Dampskibsselskabet Norden AS, you can compare the effects of market volatilities on DSV Panalpina and Dampskibsselskabet and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DSV Panalpina with a short position of Dampskibsselskabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSV Panalpina and Dampskibsselskabet.

Diversification Opportunities for DSV Panalpina and Dampskibsselskabet

-0.5

Correlation Coefficient

DSV Panalpina  Dampskibsselskabet

Very good diversification

The 3 months correlation between DSV and Dampskibsselskabet is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and Dampskibsselskabet Norden AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dampskibsselskabet and DSV Panalpina is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DSV Panalpina AS are associated (or correlated) with Dampskibsselskabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dampskibsselskabet has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and Dampskibsselskabet go up and down completely randomly.

Pair Corralation between DSV Panalpina and Dampskibsselskabet

Assuming the 90 days trading horizon DSV Panalpina AS is expected to generate 0.45 times more return on investment than Dampskibsselskabet. However, DSV Panalpina AS is 2.23 times less risky than Dampskibsselskabet. It trades about 0.01 of its potential returns per unit of risk. Dampskibsselskabet Norden AS is currently generating about -0.24 per unit of risk. If you would invest  150,400  in DSV Panalpina AS on September 23, 2024 and sell it today you would earn a total of  300.00  from holding DSV Panalpina AS or generate 0.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

DSV Panalpina AS  vs.  Dampskibsselskabet Norden AS

DSV Panalpina AS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DSV Panalpina AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DSV Panalpina may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dampskibsselskabet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dampskibsselskabet Norden AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with DSV Panalpina and Dampskibsselskabet

The main advantage of trading using opposite DSV Panalpina and Dampskibsselskabet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSV Panalpina position performs unexpectedly, Dampskibsselskabet can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dampskibsselskabet will offset losses from the drop in Dampskibsselskabet's long position.

The idea behind DSV Panalpina AS and Dampskibsselskabet Norden AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.